FTC to place limits on Google’s use of standards patents

Feds are likely to leave the issue of whether search is fair to the Europeans.

Federal antitrust enforcers have been looking into Google this year on two issues: how the company arranges its search results, and its use of standards-based patents as ammunition in the sprawling smartphone wars.

Just two months ago, it looked like there was going to be action before the end of the year on the search fairness issue. Today, the ground has shifted. It looks like the Federal Trade Commission has almost reached a deal with Google over the patent issue, and the FTC may leave action over search results to European regulators, according to a report in Politico.

The big question is whether Google will be able to use such patents to get an injunction that could kick competitors' products off the market. In a case involving Google-owned Motorola, a federal judge has already ruled standards-based patents—which involve a promise to license on a "reasonable" basis—can't be used to win injunctions. Other bodies, including the International Trade Commission, are also considering how to deal with standards-based patents.

In two recent cases, a majority of FTC commissioners found using standards-based patents to ask for injunctions or outsized royalty payments could be considered unfairly anti-competitive.

Google and its handset-maker allies want to use standards-based patents to file patent counter-suits against Microsoft and Apple, which have tended to use non-standards-based patents to go after Android. If judges and government agencies continue to find Google's practice problematic, it could seriously weaken Google's position in patent battles against its competitors.

70 Reader Comments

So... holders of standards based patents will have almost no recourse to get reimbursed by patent infringers, while those who hold non-standards based or (overly broad) design patents can ask for absolutely ridiculous licensing amounts and it's completely OK?

Well standards encumbered patents are all well and good, but how many times do you need to ask them to pay what everyone else pays before there are actual consequences? It seems to me that if FRAND patents are deemed unfit to warrant an injunction, companies will just stop making new patents FRAND encumbered. I mean everything about these standards based patents are nebulous and uncertain. Can someone just tell us what fair amounts to and what they should do when someone refuses to pay so we can be done with it?

Maybe it’s just me, but I feel like infringing on FRAND patents is actually worse than infringing on non-standards patents. When violating standards patents, it really just shows that you couldn't be bothered to do the minimum amount of effort to obtain a license offered under fair, reasonable, and non-discriminatory terms.

Apple is not paying for the patent-standard for 4G connection (owned by Samsung and Nextel I believe, but I could be wrong). Without that patent, Apple is not allowed to access 4G connections. Yet, Apple has released the iPhone 5 that utilizes 4G connections. How is it fair to not allow an injunction against the product until they meet the standard and license the patent, or come up with their own connection that they can then patent and turn into a standard that others can license?

Yet, Samsung can't release a product that, in a very general way, looks like an iPhone (just in basic shape) and Apple can call for an injunction against that product?

Where's the fairness in this equation? I'm not trying to fan the flame of the Android/Apple war with this statement, I'm just trying to see how Apple can get away without licensing a standard patent (that everyone else has to license to use) and be exempt from an injunction?

If anything, I think this idea needs to be reversed. Only products that infringe on standards-patents or FRAND should be able to have an injunction filed against them, and design or "trade-dress" patents should only be able to ask for damages. Why is the reverse true?

So... holders of standards based patents will have almost no recourse to get reimbursed by patent infringers, while those who hold non-standards based or (overly broad) design patents can ask for absolutely ridiculous licensing amounts and it's completely OK?

Why don't the FTC get the patent system fixed before mucking in this.

1) No, holders of standards based patents that they pledged to license under FRAND terms will have strong protection that enables them to get paid under the terms. They will not, however, be able to use those patents as a cudgle in other, unrelated cases.

I think we need better principles regarding patents that a company has submitted for use in a standard and agreed to license under Fair, Reasonable, and Non-Discriminatory terms.

1. Injunctions are only applicable if there is no financial recourse that can solve the issue. If a company has agreed to FRAND terms for a patent, that obviously does not apply. Therefore I see no way an injunction should ever be issued over a FRAND patent.2. Licensing which charges a percent of the final product is inherently discriminatory. Whether a device has access to a standard 4G connection or not should dictate a fixed licensing cost, regardless of the added value a company has built around the access. If I replace a $100 screen with a $200 screen in my device and charge the extra $100, that should not raise my 4G licensing costs.3. All licensing terms for all FRAND agreements should be public. Otherwise there is no way to verify that terms are FRAND.

It seems pretty obvious to me that Motorola, who let's remember is the plaintiff here and is not acting defensively, has overstepped their patent rights. Unlike when Apple sued Samsung for copying their products, Motorola previously agreed to FRAND terms and can't take that back now that the standard is widespread and start suing for injunctions. If Google wants to "not be evil", they need to stop suing people over these patents.

Well standards encumbered patents are all well and good, but how many times do you need to ask them to pay what everyone else pays before there are actual consequences? It seems to me that if FRAND patents are deemed unfit to warrant an injunction, companies will just stop making new patents FRAND encumbered. I mean everything about these standards based patents are nebulous and uncertain. Can someone just tell us what fair amounts to and what they should do when someone refuses to pay so we can be done with it?

That seems fair; if a patent isn't part of a standard, then, the potential infringer should be allowed to work around it.

That is, after all, what Motorola, HTC, and Samsung have done to avoid paying Apple specific fees and to avoid injunctions over infringement.

And if the patent is still infringed upon the holder is free to sue and enjoin because, well, the holder's patent has been infringed.

The problem is that FRAND patents are required to be standards compliant. The essence of FRAND is that these patents cannot be worked around at all so you are required to infringe and thus required to pay.

Thus the furor over fair, reasonable, and non descriminatory.

What Motorola should have done is make these patents part of a pool, like others have, and then they would have been paid automatically like others have.

Apple, in this example, has patents in the H.264 pool, as does Microsoft, and both get cuts from the licensing bodies when H.264 is licensed.

Because Motorola is not part of the pool they have to negotiate outside the pool.

Apple is not paying for the patent-standard for 4G connection (owned by Samsung and Nextel I believe, but I could be wrong).

That's news to me.

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Without that patent, Apple is not allowed to access 4G connections. Yet, Apple has released the iPhone 5 that utilizes 4G connections. How is it fair to not allow an injunction against the product until they meet the standard and license the patent, or come up with their own connection that they can then patent and turn into a standard that others can license?

Why is it fair that Apple should be banned from releasing a product over SEP when they purchase the HW that implements said patent from Qualcomm?

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Yet, Samsung can't release a product that, in a very general way, looks like an iPhone (just in basic shape) and Apple can call for an injunction against that product?

That's how IP ownership works, yes. I can't write a Harry Potter book even if I never use any character from the original universe either.

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Where's the fairness in this equation? I'm not trying to fan the flame of the Android/Apple war with this statement, I'm just trying to see how Apple can get away without licensing a standard patent (that everyone else has to license to use) and be exempt from an injunction?

Because you have no choice and are forced to infringe on standards essential patents.

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If anything, I think this idea needs to be reversed. Only products that infringe on standards-patents or FRAND should be able to have an injunction filed against them, and design or "trade-dress" patents should only be able to ask for damages. Why is the reverse true?

Because you are free to not infringe Apple's patents any time you wish.

I think the fairest way for this to be handled is that all SEP needs to be entered into a pool and handled by the standards body and if you do not submit your patent to the pool it cannot be essential to the patent. Then everyone who licenses the patent to the pool gets paid by the body, etc, and everyone who applies to the pool for a license gets one without any jockeying by patent owners.

You know, the way H.264 works right now, excepting that Google has expressly avoided putting their patents into the MPEG-LA pool that both Microsoft and Apple have participated in.

I think the fairest way for this to be handled is that all SEP needs to be entered into a pool and handled by the standards body and if you do not submit your patent to the pool it cannot be essential to the patent. Then everyone who licenses the patent to the pool gets paid by the body, etc, and everyone who applies to the pool for a license gets one without any jockeying by patent owners.

This sounds nice, but there's a pretty big loophole. What's stopping the people in charge of HTML5, or some other standard, from coming up with a new version of the standard that incorporates Apple's patented UI elements? Does that then force Apple to put their patents into the pool or lose any of their patent rights?

So... holders of standards based patents will have almost no recourse to get reimbursed by patent infringers, while those who hold non-standards based or (overly broad) design patents can ask for absolutely ridiculous licensing amounts and it's completely OK?

Why don't the FTC get the patent system fixed before mucking in this.

They do have recourse - they go to court and force them to pay. That's the recourse they agreed to when they pledged to license their patents on FRAND terms. This is entirely reasonable.

What we need to do is come up with some system such that patents covering only a small part of a product cannot be used to enjoin the whole product, only to get damages based on a design around cost, or something similar, as suggested by Judge Posner. (And this applies better to utility patents than to design patents, certainly.)

Edit: Also, it seems like a pretty easy settlement for Google, considering that at least two federal courts have already told them they can't get injunctions with these patents. All they are agreeing to do is to agree with court orders, which they had to agree with anyway.

Well, what happens is that when a company agrees that it's patents are standards, and remember that they must actively seek to have their patents declared as "essential" which gives them advantages, then they should be required to hold to their agreements. Period!

But what Samsung and Motorola/Google are attempting to do is to selectively target a few companies in a way that unfairly attempts to get them to pay tens, if not hundreds of times what those patents have been agreed already to be worth otherwise.

So, for example, both Samsung and Motorola have attempted to get chip anufacturers such as Qualcomm to release them from their contracts regarding patent exhaustion only for Apple. Qualcomm and those other companies have refused to do so.

A number of these cases are regarding chips that use these patents. The courts so far have stated that patent exhaustion applies. In other cases, patents that have been going for no more than pennies are being pushed to Apple and Microsoft for very high rates. This 2.25 and 2.40% of the total product selling price is an outrageous demand. A small number of smaller companies have had to bow to that pressure, but neither Apple nor Microsoft are in that position.

As far as non essential patents go, none of them MUST be used in a product. So while for feel, reliability and design, it would be nice to have their use, a product can be made without them. That's why companies that have those products are allowed to demand whatever they want for them, or to not license them out at all. This does make sense.

People are outraged at the wrong things. There are often thousands of SEP patents that must be licensed for a particular device without which the device can't function at all. If owners of those patents within the pools demanded over 2% for each of them, a smartphone would cost thousands of dollars, and no one here would be happy about that.

But non essential patents can be worked around, it the features can be eliminated. If a company refused to do its own R&D, or is unwilling to spend to money to buy the IP it needs, then it shouldn't complain about not having the proper IP. That doesn't mean they should be allowed to use that of others.

I understand that there are a lot of disputes over patents for a number of reasons. One is that companies believe that some patented inventions shouldn't have had the patents granted, so they use the IP, expecting (and hoping) that the patents will be invalidated. Other times, they didn't know about the patents until they were brought to their attention. I know that seems impossible, but it happens all the time. Then there is a dispute over the worth of them.

But some companies use other's IP indiscriminately, saying that their patent theft is really "innovation" and that the owners of the IP are just holding them back. That's absurd! And it's a real unfair advantage, because they just take what they want without having to pay the high costs of development. While I know how popular Android is, and the fervor a few here hold for it, Google isn't the benign company they promote themselves as being. We should know that they themselves use an exclusive license on the "page turn" patent Paige invented while at Stanford. If they were as honest as they like to depict themselves as, they wouldn't have demanded an exclusive license on that patent that have given them a big advantage over the years. If they hasn't, then perhaps other search companies would be much better positioned than they are these days to Google's disadvantage. So this cuts both ways.

Since we're talki g about hundreds of billions of dollars here, it's understandable that these things are being taken so seriously. I often think the courts don't understand just how important these patents really are.

I think the fairest way for this to be handled is that all SEP needs to be entered into a pool and handled by the standards body and if you do not submit your patent to the pool it cannot be essential to the patent. Then everyone who licenses the patent to the pool gets paid by the body, etc, and everyone who applies to the pool for a license gets one without any jockeying by patent owners.

This sounds nice, but there's a pretty big loophole. What's stopping the people in charge of HTML5, or some other standard, from coming up with a new version of the standard that incorporates Apple's patented UI elements? Does that then force Apple to put their patents into the pool or lose any of their patent rights?

If its before the fact, Apple notifies them and they remove the infringing aspects.

If it is after the fact then Apple sues for infringement, par for the course, but because there is a patent body then they shouldn't be allowed to target infringing companies but instead must go through the standards body, where the patent body will have the ability to levy the appopriate fees to the licensors since what will occur is that each member would have to pay up while the standard gets rewritten to avoid infringement.

So... holders of standards based patents will have almost no recourse to get reimbursed by patent infringers, while those who hold non-standards based or (overly broad) design patents can ask for absolutely ridiculous licensing amounts and it's completely OK?

Incorrect.

Holders of standards based patents have plenty of recourse to be financially reimbursed by patent infringers. It's the same courts that you see in the articles all the time. What Google will not be able to do however, is use standards based patents to seek injunctions.

I think the fairest way for this to be handled is that all SEP needs to be entered into a pool and handled by the standards body and if you do not submit your patent to the pool it cannot be essential to the patent. Then everyone who licenses the patent to the pool gets paid by the body, etc, and everyone who applies to the pool for a license gets one without any jockeying by patent owners.

This sounds nice, but there's a pretty big loophole. What's stopping the people in charge of HTML5, or some other standard, from coming up with a new version of the standard that incorporates Apple's patented UI elements? Does that then force Apple to put their patents into the pool or lose any of their patent rights?

I'm sure that those standards bodies can't just take elements from others and make them into or incorporate them into standards without the permission from the owner, or in many cases an active submission from the owner. Do not confuse this with de-facto standards.

Apple is not paying for the patent-standard for 4G connection (owned by Samsung and Nextel I believe, but I could be wrong). Without that patent, Apple is not allowed to access 4G connections.

Incorrect. FRAND licensing actually allows for previous infringement like what you're describing. But the company infringing will owe money on the units that did so at the time.

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Yet, Apple has released the iPhone 5 that utilizes 4G connections. How is it fair to not allow an injunction against the product until they meet the standard and license the patent, or come up with their own connection that they can then patent and turn into a standard that others can license?

Because there is no need for an injunction, standards based FRAND patents have strong financial protections that ensure the owner will be compensated for infringements found. The threat of an injunction is completely unnecessary, even in this case: the courts have ruled that Motorola will get the FRAND payments owed them by Apple for use of their patents. Problem solved, no need for an injunction.

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Yet, Samsung can't release a product that, in a very general way, looks like an iPhone (just in basic shape) and Apple can call for an injunction against that product?

The legal standard is different for non-FRAND patents; because they aren't part of a necessary standard, there is nothing saying another party HAS TO use their methods. Of course the letter of that sounds better than the spirit of the actual execution in reality, but that's how it goes. The types of patents aren't the same, so the rules are different, yes.

So... holders of standards based patents will have almost no recourse to get reimbursed by patent infringers, while those who hold non-standards based or (overly broad) design patents can ask for absolutely ridiculous licensing amounts and it's completely OK?

Why don't the FTC get the patent system fixed before mucking in this.

1) No, holders of standards based patents that they pledged to license under FRAND terms will have strong protection that enables them to get paid under the terms. They will not, however, be able to use those patents as a cudgle in other, unrelated cases.

2) Fixing this abuse of the system is a major part of fixing patents.

mattg wrote:

blacke wrote:

So... holders of standards based patents will have almost no recourse to get reimbursed by patent infringers, while those who hold non-standards based or (overly broad) design patents can ask for absolutely ridiculous licensing amounts and it's completely OK?

Why don't the FTC get the patent system fixed before mucking in this.

They do have recourse - they go to court and force them to pay. That's the recourse they agreed to when they pledged to license their patents on FRAND terms. This is entirely reasonable.

What we need to do is come up with some system such that patents covering only a small part of a product cannot be used to enjoin the whole product, only to get damages based on a design around cost, or something similar, as suggested by Judge Posner. (And this applies better to utility patents than to design patents, certainly.)

Edit: Also, it seems like a pretty easy settlement for Google, considering that at least two federal courts have already told them they can't get injunctions with these patents. All they are agreeing to do is to agree with court orders, which they had to agree with anyway.

Y3k-Bug wrote:

blacke wrote:

So... holders of standards based patents will have almost no recourse to get reimbursed by patent infringers, while those who hold non-standards based or (overly broad) design patents can ask for absolutely ridiculous licensing amounts and it's completely OK?

Incorrect.

Holders of standards based patents have plenty of recourse to be financially reimbursed by patent infringers. It's the same courts that you see in the articles all the time. What Google will not be able to do however, is use standards based patents to seek injunctions.

So let me see if I get this right, when someone infringes on a FRAND patent but doesn't pay the one holding it can only go to court to TRY and get some money out of it, but if the infringer refuses to pay up there is nothing they can do, correct?And if someone who gets sued for some patent infringement finds out that the one how is suing infringes their FRAND patents can't use them in that case but must start a completely new one?

That sounds completely fracked to me. If someone refuses to pay for FRAND patents then why shouldn't they be "banned" from that market?

So... holders of standards based patents will have almost no recourse to get reimbursed by patent infringers, while those who hold non-standards based or (overly broad) design patents can ask for absolutely ridiculous licensing amounts and it's completely OK?

Why don't the FTC get the patent system fixed before mucking in this.

From the article:In a case involving Google-owned Motorola, a federal judge has already ruled standards-based patents—which involve a promise to license on a "reasonable" basis—can't be used to win injunctions.

This is kinda misleading. What the Judge in that case said was the lawyers for Motorola didn't prove that a injunction (ban on sales) was a better remedy than a fine and that they are free to bring this issue up again later when they do have such evidence showing a injunction is better than a fine.

Although that probably won't be the case cause a fine is good enough for these essential patents. Motorola's own sales of things are not hurt by others using those patents because those patents have to be shared, the only issue is how much money.

Apple is just abusing the system. The etsi and ieee have processes for dealing with issues like this, Apple just skipped them all and went straight to the big courts.

So... holders of standards based patents will have almost no recourse to get reimbursed by patent infringers, while those who hold non-standards based or (overly broad) design patents can ask for absolutely ridiculous licensing amounts and it's completely OK?

Why don't the FTC get the patent system fixed before mucking in this.

They didn't have to agree to have those patents be part of the standard. Of course by not being part of the standard would change the worth of the patent itself.

So let me see if I get this right, when someone infringes on a FRAND patent but doesn't pay the one holding it can only go to court to TRY and get some money out of it, but if the infringer refuses to pay up there is nothing they can do, correct?And if someone who gets sued for some patent infringement finds out that the one how is suing infringes their FRAND patents can't use them in that case but must start a completely new one?

That sounds completely fracked to me. If someone refuses to pay for FRAND patents then why shouldn't they be "banned" from that market?

It sounds fracked because you're getting it wrong:

If someone infringes on a FRAND patent, the recourse is for the owner to go to the infringing party and try to negotiate a deal. If that can't be done, then they go to court where it will be determined if the patents are being infringed. If they are the offending party owes money for past infringement, plus all future sales that use those patents.

Nokia sued Apple a few years ago for the very same thing. Nokia won and Apple was found to have infringed, Apple owed a large lump sum payment, plus future payments of any iPhone sold using those patents. The key is that Nokia didn't file for an injunction to ban sales of the iPhone, which is what Samsung and Motorola/Google are doing.

So... holders of standards based patents will have almost no recourse to get reimbursed by patent infringers, while those who hold non-standards based or (overly broad) design patents can ask for absolutely ridiculous licensing amounts and it's completely OK?

Why don't the FTC get the patent system fixed before mucking in this.

They didn't have to agree to have those patents be part of the standard. Of course by not being part of the standard would change the worth of the patent itself.

Of course they have to agree to have their patents be part of a standard.

A "Standards patent" should still be usable for defensive reasons. If someone attacks you with patent litigation, you should be able to pull their use of a standards patent.

This would settle things down fast. The more standards get used and the more people whom have them, the fewer patent attacks would happen.

The problem is by default every implementor is infringing.

That's a feature, not a problem.

Company A has standard patentCompany B uses standard patentCompany B tries to sue A for some other patentCompany A pulls Company B's right to use standard patent.Company B backs down

Now sayCompany B creates somethingCompany A has a non-standard patent on thatCompany B counter sues with another non-standard patentCompany A started this whole thing so they can't pull Company B's use of a standards patent.

Can't try to sue someone, then try to pull their use of a standard's patent when they retaliate. That is not a defensive use.

A "Standards patent" should still be usable for defensive reasons. If someone attacks you with patent litigation, you should be able to pull their use of a standards patent.

This would settle things down fast. The more standards get used and the more people whom have them, the fewer patent attacks would happen.

The problem is by default every implementor is infringing.

That's a feature, not a problem.

Company A has standard patentCompany B sues patentCompany B tries to sue A for some other patentCompany A pulls Company B's right to use standard patent.Company B backs down

Now sayCompany B creates somethingCompany A has a non-standard patent on thatCompany B counter sues with another non-standard patentCompany A started this whole thing so they can't pull Company A's use of a standards patent.

Can't try to sue someone, then try to pull their use of a standard's patent when they retaliate. That is not a defensive use.

Your idea is dumb. It would give ridiculous negotiating leverage over any and all companies that take a part of the standard, as they would be guilty of infringement by virtue of using the tech in the standard.

So let me see if I get this right, when someone infringes on a FRAND patent but doesn't pay the one holding it can only go to court to TRY and get some money out of it, but if the infringer refuses to pay up there is nothing they can do, correct?And if someone who gets sued for some patent infringement finds out that the one how is suing infringes their FRAND patents can't use them in that case but must start a completely new one?

That sounds completely fracked to me. If someone refuses to pay for FRAND patents then why shouldn't they be "banned" from that market?

No, they go to court and get the court to force them to pay. If they implement the standard, proving infringement should be incredibly easy, and the only thing left is to figure out a rate. If the patent holder has evidence of past licenses, the rate should be easy to determine, and the infringer is ordered by the court to pay. Courts have teeth, and will take your property from you if you refuse to pay.

So let me see if I get this right, when someone infringes on a FRAND patent but doesn't pay the one holding it can only go to court to TRY and get some money out of it, but if the infringer refuses to pay up there is nothing they can do, correct?And if someone who gets sued for some patent infringement finds out that the one how is suing infringes their FRAND patents can't use them in that case but must start a completely new one?

That sounds completely fracked to me. If someone refuses to pay for FRAND patents then why shouldn't they be "banned" from that market?

It sounds fracked because you're getting it wrong:

If someone infringes on a FRAND patent, the recourse is for the owner to go to the infringing party and try to negotiate a deal. If that can't be done, then they go to court where it will be determined if the patents are being infringed. If they are the offending party owes money for past infringement, plus all future sales that use those patents.

Right I get that, but what if the offending party refuses to pay up even after loosing in court, what recourse is there then to take? Get the IRS (or whatever is appropriate) involved to forcefully transfer funds?

Apple is not paying for the patent-standard for 4G connection (owned by Samsung and Nextel I believe, but I could be wrong). Without that patent, Apple is not allowed to access 4G connections. Yet, Apple has released the iPhone 5 that utilizes 4G connections. How is it fair to not allow an injunction against the product until they meet the standard and license the patent, or come up with their own connection that they can then patent and turn into a standard that others can license?

Yet, Samsung can't release a product that, in a very general way, looks like an iPhone (just in basic shape) and Apple can call for an injunction against that product?

Where's the fairness in this equation? I'm not trying to fan the flame of the Android/Apple war with this statement, I'm just trying to see how Apple can get away without licensing a standard patent (that everyone else has to license to use) and be exempt from an injunction?

If anything, I think this idea needs to be reversed. Only products that infringe on standards-patents or FRAND should be able to have an injunction filed against them, and design or "trade-dress" patents should only be able to ask for damages. Why is the reverse true?

Apple gets the 4g connection tech from a chip manufacturer that has licenced the patent form samsung. samsung has already been paid, what samsung and others want is everyone from the chip maker up has to pay again for the same patent. If this logic applies then apps that use 4G connections should also pay samsung for use of 4G.

If Google wants to "not be evil", they need to stop suing people over these patents.

No, they just need to stop asking for injunctions. It's ok to sue if someone is not paying.

However, I do think it's fair to ask for an injunction is a FRAND offer has been put to a party and they refuse to pay what the rest of the market pays.

What I mean by this is for example:Motorala offers Apple a lisence for XApple refuses and after some futile negotiations Motorola sues.Motorola can show the judge their offer is equal to what others are paying for the license.Apple get the choice: Pay up for the past and start paying immediately, or there will be an injunction until such time that you start paying.Last step: Apple pays for the cost of the litigation as 'punishment' for refusing to accept a fair license.

This does rule out a preliminary injunction based on FRAND patents, since first you need to establish that there has been a fair offer. But I have seen no lawsuit where I actually think a preliminary injunction is in order. Everything software and crappy design patents (abolish that shit already) can be bought off

Right I get that, but what if the offending party refuses to pay up even after loosing in court, what recourse is there then to take? Get the IRS (or whatever is appropriate) involved to forcefully transfer funds?

How does the ability to get an injunction make this any different? Suppose the offended party gets an injunction and the offending party refuses to honor it? It's the same situation, they're in contempt of court and there is a well established procedure for handling that.

A "Standards patent" should still be usable for defensive reasons. If someone attacks you with patent litigation, you should be able to pull their use of a standards patent.

This would settle things down fast. The more standards get used and the more people whom have them, the fewer patent attacks would happen.

I don't think you fully understand the way this works. Holders of essential patents can sue to get payment for license use. If it can be shown that the company is exhibiting a willful, and blatant disregard for the rights of the patent holder, then they will lose. But payments must conform to the standards the patent holder AGREED to. They aren't allowed to break that agreement. Governments are getting upset about that, and rightly so.

Using a patent for defensive purposes is something that's hard to define. It's not too bright of management to leave money on the table if someone is using their patented IP, whether it is an essential or not.

While I don't like seeing any company improperly using other's patents, sometimes it more justified than others. As I mentioned in another post, sometimes companies aren't even aware they are using someone's patented IP. It can be very difficult, even for a professional patent search company to find some patents. Then, the patents may be thought of as improperly granted, etc. or the company may be a troll, asking for returns that are way beyond any possible value.

There are even people, and companies, that sue large companies simply because they feel it's worth the attempt, because those large companies are wealthy. Lose a few hundred thousand, or even a couple of million of court costs, but if you win, it could be tens of millions, maybe even hundreds of millions.

I think the fairest way for this to be handled is that all SEP needs to be entered into a pool and handled by the standards body and if you do not submit your patent to the pool it cannot be essential to the patent. Then everyone who licenses the patent to the pool gets paid by the body, etc, and everyone who applies to the pool for a license gets one without any jockeying by patent owners.

This sounds nice, but there's a pretty big loophole. What's stopping the people in charge of HTML5, or some other standard, from coming up with a new version of the standard that incorporates Apple's patented UI elements? Does that then force Apple to put their patents into the pool or lose any of their patent rights?

I'm sure that those standards bodies can't just take elements from others and make them into or incorporate them into standards without the permission from the owner, or in many cases an active submission from the owner. Do not confuse this with de-facto standards.

That's right. The owner needs to submit their IP. If they don't, it's not part of the process.

This isn't so simple. If something is required, but not submitted as a part of standards being set as essential, then things can become complex. A court MAY be able to declare this IP as essential, but it's not always clear.

I was talking to Janet Gongola last week about some of this. She's the Patent Reform Coordinator at the U.S. Patent and Trademark Office. There will be a big meeting about software patents this spring. I suggested that software patents be shortened to 7 years. She looked positively at that, but it isn't an area she's involved in. But she's going to pass it along.

If Google wants to "not be evil", they need to stop suing people over these patents.

No, they just need to stop asking for injunctions. It's ok to sue if someone is not paying.

However, I do think it's fair to ask for an injunction is a FRAND offer has been put to a party and they refuse to pay what the rest of the market pays.

What I mean by this is for example:Motorala offers Apple a lisence for XApple refuses and after some futile negotiations Motorola sues.Motorola can show the judge their offer is equal to what others are paying for the license.Apple get the choice: Pay up for the past and start paying immediately, or there will be an injunction until such time that you start paying.Last step: Apple pays for the cost of the litigation as 'punishment' for refusing to accept a fair license.

This does rule out a preliminary injunction based on FRAND patents, since first you need to establish that there has been a fair offer. But I have seen no lawsuit where I actually think a preliminary injunction is in order. Everything software and crappy design patents (abolish that shit already) can be bought off

You're setting up a strawman argument. If a company demands a fee that's tens, or hundreds of times what the market is paying for those patents, or patents of similar use, then it's questionable as to whether it's a real offer. Google, and Samsung, are asking for fees that exceed the value that most other companies are paying. A very small number of companies end up paying that because their position is such that they can't fight back. But their very situation may not be accepted by the court as a valid justification in any particular case. In fact, if Apple wins their case, those other companies could then go back and demand a reduction of the fees paid. They may even be able to get a reduction on the fees that have already been paid, if it was shown that the fees asked in the current case were unjustifiable, or improper.

Your assumption is that the fees being demanded by Motorola are justified, and that Apple didn't discuss it with them. Motorola may think that an offer by Apple isn't of value to them, but if it's in line with fees paid by others, even if it's a tiny fraction of what's being demanded, then it's a true offer. Even if Apple says that the amount being demanded is way too high, and that Motorola must come down before Apple will consider it, the judge, or jury, may decide that that was enough of an offer by Apple to be considered as a valid offer. A dollar amount isn't always required. Only an honest attempt to make an offer is.

As Motorola and Samsung are already in trouble over their improper use of SEP patents, it's not likely that Motorola's demands will ever be met. I do believe that even some more sophisticated judges lack understanding of these business issues.

Demanding an injunction isn't considered proper because of the low value of the patents when compared to the value of the products sold. In addition, once sales are lost, they are lost forever. But license fees can be made up later. They are rarely a company survival problem as loss of sales could be.

I think we need better principles regarding patents that a company has submitted for use in a standard and agreed to license under Fair, Reasonable, and Non-Discriminatory terms.

1. Injunctions are only applicable if there is no financial recourse that can solve the issue. If a company has agreed to FRAND terms for a patent, that obviously does not apply. Therefore I see no way an injunction should ever be issued over a FRAND patent.2. Licensing which charges a percent of the final product is inherently discriminatory. Whether a device has access to a standard 4G connection or not should dictate a fixed licensing cost, regardless of the added value a company has built around the access. If I replace a $100 screen with a $200 screen in my device and charge the extra $100, that should not raise my 4G licensing costs.3. All licensing terms for all FRAND agreements should be public. Otherwise there is no way to verify that terms are FRAND.

It seems pretty obvious to me that Motorola, who let's remember is the plaintiff here and is not acting defensively, has overstepped their patent rights. Unlike when Apple sued Samsung for copying their products, Motorola previously agreed to FRAND terms and can't take that back now that the standard is widespread and start suing for injunctions. If Google wants to "not be evil", they need to stop suing people over these patents.

Quite frankly, Google/Moto is becoming the new Rambus. Submarine patents into standards and then try to charge exhorbitant rates for them a decade later once they are in widespread use. Thier tactics are an extreme abuse of the system.

A "Standards patent" should still be usable for defensive reasons. If someone attacks you with patent litigation, you should be able to pull their use of a standards patent.

This would settle things down fast. The more standards get used and the more people whom have them, the fewer patent attacks would happen.

No, it would inflame them fast. Nokia, Microsoft and Apple have literally thousands of patents in use by standards that Motorola and Google license. If they started in on this, Google would be just as outgunned as they are in the non-standard essentials patent fight. They are hoping that nobody else will attempt to escalate the fight like they did, but my guess is that if this tactic wins out legally, MS/Apple/Nokia will start doing the same thing, and that would be bad for everyone.

So let me see if I get this right, when someone infringes on a FRAND patent but doesn't pay the one holding it can only go to court to TRY and get some money out of it, but if the infringer refuses to pay up there is nothing they can do, correct?And if someone who gets sued for some patent infringement finds out that the one how is suing infringes their FRAND patents can't use them in that case but must start a completely new one?

That sounds completely fracked to me. If someone refuses to pay for FRAND patents then why shouldn't they be "banned" from that market?

It sounds fracked because you're getting it wrong:

If someone infringes on a FRAND patent, the recourse is for the owner to go to the infringing party and try to negotiate a deal. If that can't be done, then they go to court where it will be determined if the patents are being infringed. If they are the offending party owes money for past infringement, plus all future sales that use those patents.

Right I get that, but what if the offending party refuses to pay up even after loosing in court, what recourse is there then to take? Get the IRS (or whatever is appropriate) involved to forcefully transfer funds?

The court will simply order seizure of assets, including bank accounts. You cannot simplye decide not to pay, unless you have managed to move all your assets into a nation wtih no legal arrangements with the US or any other signatory to the international patent treaties. None of the parties in these lawsuits are likely to go that far as it would be corporate suicide.

I think the fairest way for this to be handled is that all SEP needs to be entered into a pool and handled by the standards body and if you do not submit your patent to the pool it cannot be essential to the patent. Then everyone who licenses the patent to the pool gets paid by the body, etc, and everyone who applies to the pool for a license gets one without any jockeying by patent owners.

This sounds nice, but there's a pretty big loophole. What's stopping the people in charge of HTML5, or some other standard, from coming up with a new version of the standard that incorporates Apple's patented UI elements? Does that then force Apple to put their patents into the pool or lose any of their patent rights?

I'm sure that those standards bodies can't just take elements from others and make them into or incorporate them into standards without the permission from the owner, or in many cases an active submission from the owner. Do not confuse this with de-facto standards.

That's right. The owner needs to submit their IP. If they don't, it's not part of the process.

This isn't so simple. If something is required, but not submitted as a part of standards being set as essential, then things can become complex. A court MAY be able to declare this IP as essential, but it's not always clear.

I was talking to Janet Gongola last week about some of this. She's the Patent Reform Coordinator at the U.S. Patent and Trademark Office. There will be a big meeting about software patents this spring. I suggested that software patents be shortened to 7 years. She looked positively at that, but it isn't an area she's involved in. But she's going to pass it along.

The US patent office does not set patent terms. It does not matter what she looks positively at. Her job is not to write laws or treaties, only congress can do that.

Quite frankly, Google/Moto is becoming the new Rambus. Submarine patents into standards and then try to charge exhorbitant rates for them a decade later once they are in widespread use. Thier tactics are an extreme abuse of the system.

This. Plenty of Apple's patents and antics are absurd, but Google is operating a whole different level by first telling standards bodies that they will license patents under FRAND terms, and then using the patents as weapons (offensive or defensive, it doesn't matter). If you want to reserve the right to assert a patent for competitive advantage, don't submit it as part of an industry standard.